Opec+ members headed into their ministerial meeting today with no recommendation from the Joint Ministerial Monitoring Committee (JMMC) over February crude production quota levels, delegates said. And there appear to be differences within the group about what course should be taken.
The JMMC, which monitors compliance, began meeting almost an hour behind schedule and ended without a vote in order that the meeting could begin. Saudi Arabia's oil minister Prince Abdulaziz bin Salman said today that details regarding next month's crude production will be ironed out during the Opec+ meeting.
Most members of the Opec+ Joint Technical Committee (JTC), which met yesterday, are in favour of a rollover of January production quotas given prevailing market conditions, a source said. But, the UAE and Russia favour increasing output ceilings by a further 500,000 b/d in February, an Opec+ source said.
"The level of uncertainty worldwide remains high," Prince Abdulaziz said ahead of today's Opec+ meeting. The recent emergence of more infectious strains of the Covid-19 virus in Europe and elsewhere is "worrying and unpredictable", he said. He urged caution from the Opec+ group "even in this general optimistic environment" that has arisen from the roll-out of vaccinations in several countries.
"As we see light at the end of the tunnel, we must at all costs avoid the temptation to slacken in our resolve," Prince Abdulaziz said. "Do not put at risk all that we have achieved for the sake of an instant but illusionary benefit."
Opec+ needs "to smoothly, gradually reach those levels that were envisaged by the earlier agreement by 1 January in a way that does not jerk the market too much," Russia's deputy prime minister Alexander Novak said last month.
The Opec+ group, which typically convenes at a ministerial level twice a year, has decided to determine production levels for February, March and April at successive monthly meetings.
In December, the partners agreed to raise collective output quotas by 482,000 b/d for January, from the previous cut of 7.68mn b/d that was based largely on October 2018 baselines. Any further quota increases beyond January will be capped at 500,000 b/d in each month, although several oil ministers, including Prince Abdulaziz, have said that production cuts are also possible.
